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The Times - Banking group Lloyds back as investors’ favourite listed firm, AJ Bell finds
https://archive.ph/TaFcU
lti - not aware of the specifics on share count increase (exc gov) in the early days though I got them charted and can see where they have occurred. I agree we need to go hard on the buybacks and is something we should see as the norm over the coming decade, Lloyds will continue rightly to generate shares for upper management and lower level employee share scheme though I'm a little puzzled on the mechanics on this with staff putting up an element of the cash.
In my employer yearly share scheme there is a resolution that's voted on each year to create shares to support the allocation to which there is another resolution to cancel out the allocation to avoid a dilutive effect (quote below), reading through Lloyds report I don't see what they do regards these schemes other than the voting rights increase.
"To eliminate the dilutive effect of the Shareplan 2022 offering, company will, subject to regulatory approval, cancel the same number of shares in accordance with its share repurchase program as authorized by the Shareholders’ Meeting of April 28, 2022"
Interesting stats on voting shares :-
currently at 67,804,960,981
highest it got was 72,407,041,055 @ Dec 2018
back at the split it started at 63,774,511,536 @ Dec 2009
There would need to a least another year or two of buybacks to get back Dec 2009 levels, looking at the number of shares that get added each year I foresee that buybacks will need to be an annually feature, between the 2019 buybacks and the start of the current batch 1 billion shares got added.
At results Lloyds NAV was 57.92p, they've stated they've giving themselves 3 financial years to get the dividends back up the pre-covid levels, we're only half way through the 1st financial year, there is a long way to go and the Lloyd's share price will be cheap for the next few years until the market is happy dividend payments are back on track.
Expect heavy buybacks as well.
Don't get carried away with big jumps in dividends and buybacks, the executive team have been clear on the timelines, we're only half way through year 1 and it's a 3 year strategy of returning current excess capital and getting the dividend back to pre-covid levels. Their plans could easily be changes due to changes in the UK economy, there are still major supply chain issues, staffing issues, food prices shooting up which will get a magnitude worst next year when everyone in the consumer world realise how bad the grain shortage is.
Don't expect to get back on track to the pre-pandemic yearly dividends of 3.12p+ Won't be for at least another 2 full years, also don't expect any special dividends, anything extra will go on buybacks while the prices are cheap.
Question been asked on call on buybacks vs special dividends :-
They went for buyback as share price is currently below book price and it's what the large institution shareholders preferred, going forward preference will be on buybacks rather than special-dividends as they believe it gives best value to the shareholder.
They’re going to take 3 years depleting the surplus capital with preference on buybacks, don’t expect to get a normalised original dividend at pre-covid levels to arriving in your stock account until May 2025.
“ The Board intends to return surplus capital by way of a buyback programme given the amount of surplus capital, the normalisation of ordinary dividends and the flexibility that a buyback programme offers. Given the total ordinary dividend of 2.00 pence per share and the intended ordinary share buyback, equivalent to up to 2.82 pence per share, the total capital return in respect of 2021 will be up to 4.82 pence per share, equivalent to £3.4 billion.
The Board remains committed to future capital returns. Going forward, the Board intends to maintain its progressive and sustainable ordinary dividend policy and due consideration will be given to further excess capital returns at the end of the year as appropriate. The Board intends to pay down to its capital target within the course of the current plan, by 2024.”
Hoping for 1.3p final dividend and a 1p special dividend. Usually they put the equivalent of the special dividend into buy backs. While I like buy backs I don't think they've made any positive impact to the share price, there are too many shares and they create a lot shares for staff schemes etc.. so at the moment I see buy backs a necessary but will be a very long time for shareholders to see the benefit reflected in the share price/dividends.
Lloyds have always been clear on their progress dividend policy with specials / buybacks only being decided on based on full-year results, they don’t down tools just because the new guy hasn’t started yet, they carry on moving the business forward.
Waste of time signing a petition or sending email, LBG payout policy is clear on returning capital to shareholders in the form of dividends and/or buybacks. Wait for the results, they follow the same line, also listen to the QA after, at least one institution always asks a question on the dividends.